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Locked market |
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Locked marketA market is locked if the bid price equals the ask price. This can occur, for example, if the market is brokered and one side pays brokerage only, in over-the-counter trading the initiator of the transaction. Highly competitive market environment with inside bid and offering at the same price. Often occurs when an OTC dealer has not updated the market.Locked market Similar MatchesBlocked fundsBlocked fundsCash flows generated by a foreign project that cannot be immediately repatriated to the parent firm because of capital flow restrictions imposed by the host government. Locked inLocked inInvestors are said to be 'locked in' when a security they own is trading at a higher price than they paid for, but they choose not to sell in order to avoid having their profit become subject to the capital gains tax.The term also refers to the situation in which a shareholder is legally obliged not to sell shares for a given period. The most common instance of this is with initial public offerings (IPOs) where investors are comforted if they know that directors and founding shareholders are locked in for at least 6 or 12 months after flotation. Locked inLocked inWhen an investor is unable to take advantage of preferential tax treatment because of time remaining on a required holding period. Also, a commodities position in which the market has a limit up or limit down day and investors are unable to move in to or out of the market. Blocked currencyBlocked currencyA currency that is not freely convertible to other currencies due to exchange controls. |
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